CSW Industrials Inc., a supplier of HVAC, plumbing, electrical and specialty industrial products sold primarily through wholesale distribution channels, reported a 20% increase in quarterly sales as recently acquired businesses expanded its footprint with contractors and distributors, even as slower housing activity weighed on underlying demand.
For the fiscal third quarter ended Dec. 31, 2025, the Dallas-based company posted revenue of $233.0 million, up from $193.6 million a year earlier — an increase of $39.3 million, or 20.3%.
CSW manufactures and sources niche, branded products — including HVAC/R replacement parts, plumbing and electrical components, sealants, lubricants, and specialty reliability products — that are primarily sold through distributors to contractors, technicians, and industrial maintenance teams.
Company officials said all the quarterly growth came from acquisitions completed over the past year. Those additions contributed $45.0 million in sales, while existing operations declined by $5.7 million, or 2.9%, reflecting weaker residential HVAC demand and cautious inventory levels among distributors late in the year.
Net income declined to $10.3 million from $26.9 million in the same quarter last year — a drop of 61.9%. Earnings were 62 cents per share, compared with $1.60 a year earlier, as the company absorbed costs tied to acquisitions and the borrowing used to fund them.
Contractor-focused segment shows both growth and pressure
The company’s largest business, Contractor Solutions, includes HVAC/R, plumbing and electrical products that flow through wholesale distributors to contractors. Sales in that segment rose to $168.0 million from $132.2 million, an increase of 27.1%.
Acquisitions accounted for $42.7 million of that growth. At the same time, unit volumes declined as housing activity remained soft and distributors reduced inventory heading into year-end.
CSW also recorded expenses during the quarter tied to integrating recent acquisitions and to an inventory write-down related to changes in how it distributes certain products.
Specialized Reliability Solutions, which serves industrial end markets such as mining, energy and manufacturing, reported sales of $38.3 million, up 10.8% from a year earlier. Engineered Building Solutions sales were $28.5 million, down 1.3%.
During the quarter, CSW closed its $650 million acquisition of Motors & Armatures Parts, known as MARS, a supplier of HVAC and electrical replacement parts widely carried by distributors serving contractors and service technicians.
The deal significantly expanded CSW’s catalog of repair and replacement products that move through wholesale distribution networks. The company said its overall debt increased because of the purchase but remains within its target range.
For the first nine months of fiscal 2026, CSW reported revenue of $773.6 million, up from $647.8 million a year earlier — an increase of $125.8 million, or 19.4%.
Most of that growth also came from acquisitions completed in the last year. Existing operations declined by 3.8% over the period.
Net income for the nine months fell to $91.8 million from $101.6 million, a decrease of 9.6%.
Within that period, Contractor Solutions’ revenue rose 27.0% to $573.2 million, reflecting the impact of acquisitions in HVAC, plumbing and electrical products sold through distributor networks. Specialized Reliability Solutions increased 3.6% to $113.9 million, while Engineered Building Solutions was flat at $92.3 million.
CEO Joseph Armes said the acquisitions broadened CSW’s HVAC and plumbing offerings and opened access to additional end markets, though integration work is still underway.
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